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Maia Sandu: Inflation is high and solution is to increase people’s incomes

Increasing citizens’ incomes is the solution for coping with the inflation high witnessed in Moldova, said President Maia Sandu. According to the official, the Republic of Moldova cannot control the prices of energy resources that influence the prices of products and services. The Government has prepared a program of subsidies for the cold period of the year and this is intended for persons with low incomes, IPN reports.

President Sandu said that Moldova’s full dependence on imported energy resources determines a higher rate of inflation. There are no preconditions for a decline in the prices on the international market if the war in Ukraine continues.

“The rise in the prices of energy resources is a thing that we cannot control. The price of natural gas continues to grow. A new rise was seen on the market the last few days. As a result, the calculation formula is impacted and the purchase price for the Republic of Moldova increases. Owing to the war, there are no signs showing that the prices could return to normality in the near future. We are energy-dependent and are very unprepared as not much was done to ensure energy security the last 30 years,” Maia Sandu stated in the talk show “Black Box” on TV8 channel.

The official said that increasing the population’s incomes is the only solution to cope with the soaring prices. The program for providing subsidies for natural gas in the cold period of the year will be reviewed and only persons with low incomes will benefit from assistance.

“Inflation is higher in the Republic of Moldova because the consumption of energy resources accounts for a larger share of our budget than in other European states. The share of food consumption is also higher. This points to our poverty as the people with low incomes spend their earnings on utilities and food only. As we cannot control prices outside the country, increasing citizens’ incomes is the solution,” noted Maia Sandu.

She added that the National Bank and the Competition Council have the task of controlling inflation. The prices of socially important goods will be monitored so as to discourage any unjustified rise.

“Maintaining the stability of prices is the prerogative of the National Bank. The NBM took measures, but we must see if they were taken sufficiently swiftly. These measures should temper lending that has an inflationist effect. We have imported inflation as the high prices come from outside. There is also the regulation of the internal market and this is the remit of the Competition Council. This should quickly identify monopolist behaviors and impose penalties.”

Recently, on the recommendation of the Supreme Security Council, Parliament set up a special commission that will examine the decision-making process concerning the control of inflation and the monetary policy during the past 18 months. The commission consists only of members of the PAS group as the parliamentary opposition didn’t delegate representatives to work on the commission.

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